Lloyds List: Nigeria oil industry troubles force tanker charter rates higher: “Royal Dutch Shell has called force majeure on exports from its Forcados terminal and EA floating production storage and offloading vessel after attacks by militants cut production by 220,000 barrels a day.”: Thursday 19 January 2006

Martyn Wingrove

Jan 19, 2006

OIL export disruption in Nigeria has forced charterers into booking tankers amid tightening markets and pushed up charter rates.

Royal Dutch Shell has called force majeure on exports from its Forcados terminal and EA floating production storage and offloading vessel after attacks by militants cut production by 220,000 barrels a day.

Militia groups in Nigeria have threatened to attack other facilities owned by oil companies ExxonMobil, Chevron, Total and Eni in their attempts to halt Nigerian exports.

Brokers think this has rattled charterers, making them more nervous about obtaining the tankers they need to cover early February loadings.

'Charterers are watching what happens in Nigeria,' said a London broker. 'They want to make sure they secure tankers to cover their cargoes.

'Shell has called force majeure, which adds nervousness to the market and results in higher rates.'

Very large crude carrier rates have jumped to W120 this week following strong demand and tightening supplies for early February loadings.

Another broker thinks prolonged disruption of Nigerian exports could mean more vessels would be available for Middle East markets.

Oil prices climbed again as traders feared there would be more supply problems, with London-traded Brent soaring above $65 a barrel and US crude close to $67 by mid- afternoon yesterday.

The militant Movement for the Emancipation of the Niger Delta threatened to attack facilities owned by other oil majors and called on oil workers to leave the region.

'Pipelines, loading points, export tankers, tank farms, refined petroleum depots, landing strips and residences of employees can expect to be attacked,' said a spokesman for the militants.

They want to slash the country's 2.4m barrels a day production to force the government to release leaders and pass more of the oil revenues to local tribes.

Nigerian operators have stepped up security on their facilities and camps but none, apart from Shell last week, have reported any attacks.

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